Delivery technology with application to all non-psychoactive cannabinoids

Company is an enabler rather than competitor to hemp oil producers

Revenue from licensing DehydraTECH oral digestion technology

Thanks to Lexaria Bioscience Corp. (CSE: LXX) (OTCQB: LXRP), there’s no need for a spoonful of sugar to help the medicine go down. This innovative biotech has developed technology that masks the strong taste and odor of hemp oil products, eschewing the need for artificial sweeteners, which tend to come with their own fallout to heart and health. Lexaria’s DehydraTECH oral digestion technology is a ‘back office’ process that solves the taste and odor issues that confront all hemp oil producers. With the hemp oil market set to grow 38 percent annually for the near future, Lexaria is well positioned to benefit from the expansion as an enabler rather than competitor. The company intends to license its technology to hemp oil producers, whose numbers continue to rise, and has already tightened its grip on the market with a number of patent filings and registrations.

Hemp might be palatable to a troglodyte, but since it ‘tastes like a handful of grass and dirt’, according to the ‘Made by Hemp’ blog (http://dtn.fm/y1OII), a modern homo sapien, accustomed to his burger and fries, is unlikely to find it palatable. The obvious solution is to complement the intake of hemp with sugars or sweeteners. However, while sugars occurring naturally in fruits and other foods will usually pose no health problem, processed sugar and artificial sweeteners are quite the opposite. “Refined, concentrated sugar consumed in large amounts rapidly increases blood glucose and insulin levels, increases triglycerides, inflammatory mediators and oxygen radicals, and with them, the risk for diabetes, cardiovascular disease and other chronic illnesses,” according to Harvard Health (http://dtn.fm/UhVt0). Moreover, artificial sweeteners can be addictive. One pre-clinical study worryingly demonstrated that rodents, when given a choice between intravenous cocaine and oral saccharine, mostly chose the saccharine.

The prospects for Lexaria’s DehydraTECH technology are decidedly upbeat. According to this Forbes piece (http://dtn.fm/CbE4N), the hemp-derived cannabidiol (CBD) market is growing at a steady clip, citing statistics by the Hemp Business Journal that show sales of $90 million in 2015 rising to $450 million by 2020. That 38% CAGR will, undoubtedly, be boosted if and when legalization of recreational cannabis becomes a reality in Canada on July 1, 2018. Lexaria is poised to ride that wave to the crest. At present, the company is in negotiations with major cannabinoid companies to license its technology. The smallest deal with any one of these could increase revenues by over $1 million; the largest could increase them by much, much more, as noted by CEO Chris Bunka in a recent interview (http://dtn.fm/mu1ZI). Since Lexaria is employing a lucrative licensing model that is likely to yield 90-100% of revenues as profit, the bottom line won’t be far below the revenue figure. The company expects to have its first major agreement wrapped up by the end of the year.

Presently, Lexaria is the only company in the world that has been awarded a patent for the improved (oral or ingestible, including pills) delivery of all non-psychoactive cannabinoids. Patents have been awarded in the U.S. and Australia and are pending in 40 more countries. This puts the company in the unusually advantageous position of owning proprietary technology that can deliver a vast range of non-psychoactive cannabinoid-based drugs. Rather than being a competitor to clinical stage biotech companies, Lexaria is an enabler by offering its molecular delivery technology for licensing.

The results are beginning to show. So far in 2017, revenues have exceeded the total for all of 2016. That trend is likely to continue, since Lexaria’s DehydraTECH technology offers oral digestion of hemp oil in a most delightful way.

QualityStocks is committed to connecting subscribers with companies that have huge potential to succeed in the short and long-term future. It is part of our mission statement to help the investment community discover emerging companies that offer excellent growth potential. We offer several ways for investors to learn more about investing in these companies as well as find and evaluate them.